Financial Awareness - Risk, Stability & Emerging Finance
Which of the following is TRUE regarding Certificates of Deposit (CDs) in the Indian money market?
Which of the following is TRUE regarding Certificates of Deposit (CDs) in the Indian money market?
medium Q8 of 15
Step-by-Step Solution
Step 1: Recall features of Certificates of Deposit
CDs are unsecured, negotiable, short-term instruments issued by banks to raise funds.Step 2: Analyze options
Government securities are not CDs, equity shares are not money market instruments, and CDs are short-term, not long-term bonds.Final Answer:
They are unsecured short-term instruments issued by banks → Option AQuick Check:
Certificates of Deposit = unsecured bank-issued short-term instruments ✅
Quick Trick: CDs = bank-issued short-term unsecured instruments.
Common Mistakes:
- Confusing CDs with government securities or equity shares.
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